Rep. Emily McAsey

Filed: 4/7/2016

 

 


 

 


 
09900HB6165ham001LRB099 19733 MJP 47102 a

1
AMENDMENT TO HOUSE BILL 6165

2    AMENDMENT NO. ______. Amend House Bill 6165 by replacing
3everything after the enacting clause with the following:
 
4    "Section 1. Short title. This Act may be cited as the Crude
5Oil Pipeline Environmental Liability Insurance Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Agency" means the Illinois Environmental Protection
8Agency.
9    "Minimum amount of bitumen" means 100,000 barrels per day
10of bitumen.
 
11    Section 10. Crude oil carriers.
12    (a) On and after the effective date of this Act, the owner
13of a crude oil pipeline in the State transporting, in whole or
14in part, more than the minimum amount of bitumen shall report
15that pipeline to the Agency. If a pipeline that did not

 

 

09900HB6165ham001- 2 -LRB099 19733 MJP 47102 a

1transport more than the minimum amount of bitumen on the
2reporting date does so later in the same year, or in any
3following year, the owner of the pipeline shall amend its
4report within 30 days to reflect its new status.
5    (b) On January 1, 2017, every owner of a crude oil pipeline
6that transported, in whole or in part, more than the minimum
7amount of bitumen at any time in the calendar year preceding
8and including January 1, 2017 shall maintain insurance coverage
9in accordance with this Section and maintain that coverage at
10all times for each pipeline where and when bitumen is being
11transported.
12    (c) After January 1, 2017, in any year in which a pipeline
13transports more than the minimum amount of bitumen, within 6
14months after reporting the transport of more than the minimum
15amount of bitumen, the owner of the pipeline shall obtain
16insurance coverage in accordance with subsection (d) of this
17Section and maintain that coverage at all times for each
18pipeline where and when bitumen is being transported.
19    (d) To satisfy the requirements of this Section, the owner
20of a pipeline shall have environmental impairment liability
21insurance or the equivalent that provides coverage for on-site
22and off-site cleanup expenses, damages to natural resources,
23emergency response costs up to at least $1,000,000, bodily
24injury liability, and property damage liability for each
25pipeline.
26        (1) The insurance shall be provided by an independent

 

 

09900HB6165ham001- 3 -LRB099 19733 MJP 47102 a

1    third-party insurer with an A.M. Best Company, Inc. rating
2    of at least "A".
3        (2) The insurance may be secondary to any other
4    coverage maintained by the owner or provided by the federal
5    Oil Spill Liability Trust Fund, but primary and
6    non-contributory to any coverage maintained by the State or
7    units of local government.
8        (3) The insurance shall be occurrence based.
9        (4) The State shall be listed as an additional insured
10    on the policy.
11        (5) The amount of insurance shall not be less than
12    $25,000,000 for each pipeline. The Agency, in consultation
13    with the Department of Insurance, shall require additional
14    coverage in accordance with this Section that the Agency
15    concludes would be necessary in a worst-case oil spill
16    scenario where the pipeline owner is not capable of paying
17    to remediate the site and compensate damages, including an
18    annual cost of remediation adjustment, to the maximum
19    available from the market for insurance. If the amount of
20    insurance found to be available in a year is not sufficient
21    to cover the worst-case oil spill scenario the Agency
22    shall:
23            (A) state the amount of the deficiency; and
24            (B) in each of the following years in which a
25        deficiency exists, review the insurance market to
26        determine whether the amount of coverage available has

 

 

09900HB6165ham001- 4 -LRB099 19733 MJP 47102 a

1        increased, and adjust the coverage to the maximum
2        available up to the amount required to remediate the
3        site and compensate for damages in a worst case oil
4        spill.
5        (6) The Agency shall charge back the cost of making the
6    assessments of a worst-case accident and the availability
7    of the required insurance in the market in paragraph (5) to
8    the owner of the pipeline.
9        (7) The policy shall obligate the insurer to provide 60
10    days notice of cancellation or non-renewal to the Agency,
11    as well as to the owner who has purchased the policy.
12        (8) If the insured has received a 60-day notice of
13    cancellation under paragraph (7), it shall replace that
14    policy with a new policy in accordance with this Section
15    before its existing policy is terminated or otherwise it
16    shall cease transporting bitumen through the pipeline. If
17    the owner's policy has been terminated and not replaced
18    within 60 days, the owner may resume use of the pipeline
19    for transporting bitumen if it later purchases insurance in
20    accordance with this Section, submits proof to the Agency,
21    and receives an order from the Agency certifying the
22    subsequent insurance policy is concurrent and complies
23    with this Section.
24        (9) At all times, the owner shall keep the Agency
25    informed in writing of all changes in the status of the
26    pipeline related to whether it transports more than the

 

 

09900HB6165ham001- 5 -LRB099 19733 MJP 47102 a

1    minimum amount of bitumen, and, if so, whether it maintains
2    insurance in accordance with this Section. The owner of a
3    pipeline that transports more than the minimum amount of
4    bitumen for only part of the time in a calendar year may
5    elect to maintain its status as covered under this Section
6    as if it transported more than the minimum amount of
7    bitumen for the entire year.
 
8    Section 99. Effective date. This Act takes effect January
91, 2017.".